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figuring out how to charge

Started by Qweaver, November 13, 2017, 02:24:35 PM

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dgdrls

I found this a while back when I was looking at the purchase of a mill.
It's not the ultimate, but it can help guide on expenses, costs and profit.

Yellowhammer and Chop shop make very good points,  I was the same when I worked regularly
in the Survey Industry,  do half the jobs for twice the profit, 

best




Blackhawk1

Charging a fair price for quality work is always hard. Our current price structure is 120.00 per hour with all equipment and man power supplied, or 1.50 per board foot. We try to give the customer the most bang for his buck and send them home happy. We operate with a TimberKing 2000 and a Peterson ASM. Moving of anything heavy is done with a Kubota 95 HP skid steer. pallets are provided if needed.

Doug Caroselli
512-738-1770

alanh

I just learned the "charge more for big stuff" lesson this week. A nearby municipality ordered dump truck side  boards for six trucks, including 2 tri axles and decking for 3 20 ton trailers. They were o.k. with red oak because the town employees smash the heck out of everything well before it rots. I had plenty of logs and agreed to do it for the 2.00 bd ft they were used to paying. I didnt think too much of it when they called and asked to make the side boards 3" x 12" instead of 2", I thought "Cool, more bd ft." Note to self, a 3"x12" x 17ft soaking wet red oak board is very, very, heavy

Dozer_Man

I have been thinking more and more here lately of going to an hourly rate instead of a BF rate. For the fact that it would take into account half rotted, crooked, long, or very big logs and if they want to take a chance on them then that is on them. I have been charging $.30 a bf at the customer's site and they provide the help in off bearing and get the logs to the loading arms. There have been many cases where the owner of the logs is there helping and their neighbors come over and talk then there is no help and I am doing it alone or they say on the rotted or ugly logs lets just see what we get out of it. If they were being charged hourly they would think twice on these things or be charged accordingly. That's not counting if I have to split a huge log or price for hitting metal in their logs, that would be extra. In this business we got to make money to pay for our equipment and our time. If not then we might as well all be sitting at the barber shop talking about the days we used to saw because we wont be in business long.
Brady Crabtree
Sawmill Bottom   '15 WM Lt35HD,  WM Pro Sawyer Network, 90 Chevy C50, 04 ram cummins, Stihl 362, 2008 Bobcat T180

YellowHammer

When I'm charging by the bdft, every time the saw head moves down the rails I'm getting paid for it, whether it's a nasty log, rotten or otherwise.  That's because when the customer drop the nasties off, I get to look at them as I'm unloading them, and I point out the ones that are not any good, give them the option to not saw, and also give them the option for me to use my best judgement.  If they want an estimate, I have a can of marking spray paint and mark the ones to be skipped with a big pink "X" on the side and skip those for the estimate.

If they want me to saw the uglies anyway, (some people are like that, and if the logs or sticks are real bad or too small I just refuse) I'll do it and stack the garbage wood along with the good stuff.  Then when they pay, I tell them how much money they could have saved if they had been more judicious and not have me saw their nasty logs, and only saw the good ones.  So next time they show up, they only bring me good logs. :D

Either way, I don't saw for free, or even at a reduced rate, it's my mill and I get to make the final decision.   I once had a customer bring me a trailer load of some nasty logs and they were so bad I refused to mill them outright.  He started complaining so I told him to drive them down the road to another mill about 10 miles away.  He said he just came from there, and they refused him, also.  He said thought I would do it, even though the "real sawmill" up the road wouldn't. 

 
 
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

PA_Walnut

 :D :D :D That's awesome. There's a dude local that saws for people with a similar demeanor, yet he's raised the bar by making them take the slab wood too unless they PAY him to dispose of it. *DanG...I'm doing it wrong. (not really since I just saw for myself)  :o
Quote from: YellowHammer on December 05, 2017, 05:05:08 PM
When I'm charging by the bdft, every time the saw head moves down the rails I'm getting paid for it, whether it's a nasty log, rotten or otherwise.  That's because when the customer drop the nasties off, I get to look at them as I'm unloading them, and I point out the ones that are not any good, give them the option to not saw, and also give them the option for me to use my best judgement.  If they want an estimate, I have a can of marking spray paint and mark the ones to be skipped with a big pink "X" on the side and skip those for the estimate.

If they want me to saw the uglies anyway, (some people are like that, and if the logs or sticks are real bad or too small I just refuse) I'll do it and stack the garbage wood along with the good stuff.  Then when they pay, I tell them how much money they could have saved if they had been more judicious and not have me saw their nasty logs, and only saw the good ones.  So next time they show up, they only bring me good logs. :D

Either way, I don't saw for free, or even at a reduced rate, it's my mill and I get to make the final decision.   I once had a customer bring me a trailer load of some nasty logs and they were so bad I refused to mill them outright.  He started complaining so I told him to drive them down the road to another mill about 10 miles away.  He said he just came from there, and they refused him, also.  He said thought I would do it, even though the "real sawmill" up the road wouldn't. 

 

I own my own small piece of the world on an 8 acre plot on the side of a mountain with walnut, hickory, ash and spruce.
LT40HD Wide 35HP Diesel
Peterson Dedicated Wide Slabber
Kubota M62 Tractor/Backhoe
WoodMizer KD250 Kiln
Northland 800 Kiln

WV Sawmiller

   I observed with a fellow member recently (who shall remain nameless :)) who scaled every log before sawing and that is what he customer paid for whether it made good lumber or scrap.

   I normally scale the finished lumber and charge based on that in hopes I will beat the scale estimates. But if they are small, crooked logs or special cuts I bill by the hour. I might start just scaling the logs before cutting as mentioned above.

   We have mentioned several times throughout this and similar threads all methods are fair as long as you explain up front and the customer understands and agrees prior to starting to saw his logs.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

YellowHammer

I try to be as fair as possible, and final tally and charge after sawing.  However, since people bring their logs to me, I have everything setup to saw as efficiently as possible.  I tell folks I will mill the logs as if they were my own, which generally means a lot to most customers, because they can look at the wood in our showroom and see that I will get the best I can from their logs.  However, this is a full time business for me, and I'm losing money if I'm standing around or having a customer tell me to put a doubtful log on the mill and "let's see if it's worth sawing".  So I tell them everything is free until the log goes on the mill, then it's going to get sawn, whether it's good or bad because although mills are designed to load whole logs, they are not designed to unload whole logs.  So once the log goes on the mill, its going to get sawn and if nothing else come off in smaller pieces.  Then I hand them the pink spray can and most times they get the message and go back to their stack and start putting a few X marks on them.
I think a lot of it comes down to the fact that customers have no idea how much money is invested in a serious a sawmill operation, so don't realize what they are asking.  I had one guy not too long ago say he loved my mill and stuff, and he then asked me if it was more than ten grand.  I told him ten grand wouldn't even pay the taxes.
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

PA_Walnut

Quote from: YellowHammer on December 05, 2017, 11:19:01 PM
I had one guy not too long ago say he loved my mill and stuff, and he then asked me if it was more than ten grand.  I told him ten grand wouldn't even pay the taxes.

That's beautiful!  :D
I think it's inerrantly built into most people to devalue the work/equipment/achievements of others, and that propensity increases many-fold during a purchase transaction.

I recently had a dude who wanted to buy some of my most premium figured 12/4 curly maple. It's not cheap and I don't really care if it sells or not. During the haggle-cycle, he said, "Well, I could just get a mill, buy the logs, and make me own.". So, I responded, "Yes, you surely could have, but you didn't, which is why you are here.". While I'm usually always willing to adjust according to logic, volume, barter, etc. The "devalue haggle method" rewards zero return...in fact, it has the opposite effect.  ;D

A wise man once said, "Nobody made a greater mistake than he who did nothing because he could do only a little."
I own my own small piece of the world on an 8 acre plot on the side of a mountain with walnut, hickory, ash and spruce.
LT40HD Wide 35HP Diesel
Peterson Dedicated Wide Slabber
Kubota M62 Tractor/Backhoe
WoodMizer KD250 Kiln
Northland 800 Kiln

terrifictimbersllc

Ask him whether he likes to go out to eat or does he prefer to buy the restaurant instead.
DJ Hoover, Terrific Timbers LLC,  Mystic CT Woodmizer Million Board Foot Club member. 2019 LT70 Super Wide 55 Yanmar,  LogRite fetching arch, WM BMS250 sharpener/BMT250 setter.  2001 F350 7.3L PSD 6 spd manual ZF 4x4 Crew Cab Long Bed

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